American Airlines Inc. has asked a federal judge in Fort Worth, Texas, to dismiss an ERISA lawsuit by a pilot against two retirement plans, saying the plaintiff hasn't invested in the ESG investments he criticized because the plans don't offer them.
"He has never invested either in any of the 25 funds he identifies in the complaint as ESG funds or in any investment options sponsored by the challenged managers," said the company's motion to dismiss Aug. 4 in Spence vs. American Airlines Inc. et al. "It would have been impossible for plaintiff to find any such investment options in the plans' core investment lineup, where he has chosen to invest, because there are none."
The plaintiff sued June 2 using politically charged language common to state and federal legislators' attacks on so-called woke investment strategies of state governments and public pension plans.
"Defendants have breached their fiduciary duties in violation of ERISA by investing millions of dollars of American Airlines employees' retirement savings with investment managers and investment funds that pursue leftist political agendas through environmental, social and governance strategies, proxy voting, and shareholder activism," the pilot's lawsuit said.
The lawsuit cited 25 investments that the plaintiff claimed violate ERISA due to their ESG focus. The plaintiff also cited 90 other investment managers that provide investments "that are not branded as ESG funds, but are managed by investment companies who have voted for many of the most egregious examples of ESG policy mandates."
The lawsuit offered no performance data or cost data to support its claims.
The pilot also sued Edelman Financial Engines, an investment adviser, and Fidelity Investments, the record keeper, in the proposed class-action suit. Edelman and Fidelity were both dropped as defendants in the case last month.
American Airlines pointed out that the challenged investments and challenged investment managers are available via a self-directed brokerage account, which allows participants to select options outside those that are vetted by the retirement plans for the core menus.
"Like many other defined contribution plans in the country, the plans also allow participants the freedom to reject the choices arranged by the (investment) committee, and to invest their pan balances at their own risk through an individual, self-directed brokerage account," the airline wrote.
"Plaintiff has never opted for a brokerage account at all, much less navigated through the countless investment options accessible through it to find and invest in the ones he now challenges," the airline wrote. "Plaintiff's lack of standing warrants dismissal of the complaint in its entirety."
American Airlines Inc. 401(k) Plan for Pilots had $11.1 billion in assets, and the American Airlines Inc. 401(k) Plan had $15.5 billion in assets as of Dec. 31, 2021. Both plans are based in Fort Worth, Texas, and the data for both are from the latest Form 5500.